- The United States is missing a historic opportunity to break a 40-year stalemate between Israel and Syria, private negotiators who drafted an unofficial peace plan between the two Middle Eastern foes said on Tuesday.

Former senior Israeli diplomat Alon Liel and Syrian-American businessman Ibrahim Soliman said in a joint interview that their initiative for an agreement on returning the occupied Golan Heights to Syria showed how the two countries could reach peace.

The two men, who held two years of secret talks hosted by the Swiss government in 2004-6, spoke to Reuters on the fringes of a conference on the Middle East organized by the Socialist group in the European Parliament.

"I strongly believe that the U.S. and Israel are missing a very big opportunity for peace," said Soliman.

Syrian President Bashar al-Assad has repeatedly expressed interest in resuming talks with Israel, which failed in 2000.

An official Syrian representative, foreign ministry legal adviser Riad Daoudi, told the Brussels conference Damascus was ready for talks without preconditions and said Israel and Syria had solved some 85 percent of the problem in past negotiations.

Israeli Prime Minister Ehud Olmert has also spoken recently of a desire to hold talks with Syria, while saying Israel wants to know if Damascus is willing to cut ties with Iran, Lebanon's Hezbollah guerrillas and Palestinian militant groups.

Asked about those concerns, Daoudi said a peace deal on the Golan Heights "will produce a regional environment conducive to settling many other issues".

Both governments dissociated themselves from the private peace initiative, although Soliman was invited to address an unprecedented session of the Israeli parliament's foreign affairs and defense committee

Liel and Soliman said what was lacking was U.S. engagement to bring the two sides to the table. Both urged the European Union to press the Bush administration to play an active role.

"In the last few weeks, I have the feeling both leaders, Bashar al-Assad and Ehud Olmert are ready to talk about peace between Israel and Syria, and we have a bottleneck which is in Washington," Liel said.

President George W. Bush appeared to rule out a U.S. role when he met Olmert two weeks ago, saying: "If the prime minister wants to negotiate with Syria, he doesn't need me to mediate."

Diplomats say Washington is still trying to isolate Syria over its alliance with Iran, support for Hezbollah and Hamas militants and suspected role in assassinating politicians in neighboring Lebanon.

The European Union has reopened a cautious dialogue with Damascus since March. EU foreign policy chief Javier Solana signaled his interest in the private peace initiative by inviting Liel and Soliman to meet him while in Brussels.

Their plan centers on the idea of an international nature park on the Syrian side of the Sea of Galilee, the size of which would be determined in negotiations, which both Israelis and Syrians could visit freely but neither would live in.

Under a peace agreement, Syria would regain immediately sovereignty over the entire Golan Heights, up to the line it held before the 1967 Middle East war, but Israel would have between five and 15 years to evacuate all its settlements.

The region would be demilitarized and the United States and the European Union would monitor Syria's wider international behavior during the transition period -- an assurance concerning Lebanon and Palestinian radical groups.

(Reuters)